SEC Whistleblower Lawyer Blog

Articles Posted in Whistleblower award

Even with political clouds of uncertainty from the Trump administration, the head of U.S Securities and Exchange Commission is moving the agency full speed ahead, all the while chastising companies that retaliate or discourage their employees from blowing the whistle on possible securities violations.

Last month, Jane Norberg; the current chief of the SEC’s Office of the Whistleblower spoke on a panel at the Practising Law Institute on Corporate Whistleblowing. During the panel, she told attendees that they could expect the same level of enforcement and investigation as in years past.

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The CFTC Whistleblower program today announced the launch of a news portal, event schedule, and FAQ for its whistleblower program on its website

This new portal will contain industry news, CFTC Events and a FAQ covering the Whistleblower program and information on submitting a whistleblower tip and claiming awards based on accurate tips. The CFTC hopes this newly created section of its site will provide higher quality tips that lead to larger sanctions and more awards being paid out to tipsters.

Some of the tips for Whistleblowers suggested by the CFTC

New York Attorney General Eric Schneiderman announced a whistleblower-initiated $40 million settlement with Alabama-based investment firm Harbert Management Corp. over unpaid state income taxes claimed instead in lower-tax Alabama.

The dispute arose out of 2015 whistleblower allegations that members of Harbert failed to pay millions of dollars in taxes.  New York law requires businesses that operate both in and out of New York to apportion taxes on income derived in New York.

The settlement alleges that Harbinger Partners Offshore Managers LLC, a $26 billion New York City hedge fund sponsored by Harbert, failed to pay certain required taxes in New York from 2004 through 2009.  Instead, Harbinger paid taxes in Alabama, where rates were much lower.

The SEC announced it was awarding a company insider a whistleblower award of more than $500,000 for reporting information that prompted an SEC investigation into well-hidden misconduct that resulted in an SEC enforcement action.

The whistleblower award is the second award announced by the SEC in as many weeks, bringing the total amount awarded to approximately $154 million to 44 whistleblowers.  Additionally, the whistleblower tips have resulted in almost $1 billion in financial remedies.

According to the SEC Order Determining Whistleblower Claim, the SEC Whistleblower Program’s Claims Review Staff recommended that the whistleblower receive an award because the whistleblower voluntarily provided original information to the SEC that led to the successful enforcement of the action pursuant to Section 21F(b)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”).

The SEC announced an award of almost $4 million to a whistleblower who provided detailed, specific information about serious securities misconduct and provided ongoing assistance throughout the ensuing investigation.

According to the SEC order, the SEC recommended that the whistleblower receive an award because the individual voluntarily provided original information to the SEC that led to a successful enforcement action.  Further, while the order redacted the percentage of the monetary sanctions the whistleblower would collect, the final amount was “almost $4 million.”

According to the SEC press release, the whistleblower had industry-specific knowledge and expertise, which is helpful to the SEC and can help it go through the process more efficiently.

The SEC announced an award of over $7 million split among three (3) whistleblower who helped the SEC litigate an investment scheme.

The SEC began their investigation when one of the whistleblowers provided a tip to the SEC.  The initial whistleblower will receive more than $4 million for his initial information, per the SEC.  During the SEC’s investigation, the two other whistleblowers together provided new information that significantly contributed to the SEC’s successful enforcement action.  The two other whistleblowers will split more than $3 million for the information they provided to the SEC.

According to the SEC, the tips provided by various whistleblowers have resulted in almost $1 billion in financial remedies, a great amount given that the program was established less than five years ago.

How the Investment Management Firm BlackRock Undermined Whistleblower Incentives on

Firm managing $5.1 trillion is forced to change improper employee whistleblower policy

Until recently, the world’s largest investment management firm forced ex-employees to sign away their rights to potential whistleblower awards in order to receive employee separation package payments. BlackRock, Inc., which has 30 offices in 70 countries, was charged by the SEC and fined $340,000 for the illegal policy, which is alleged to have affected more than 1,000 employees.

BlackRock’s controversial policy, which the SEC alleged was retaliation for a new rule improving whistleblower awards, isn’t the only example of a financial firm attempting to discourage current or former employees from blowing the whistle.

The Securities and Exchange Commission (the “SEC”) announced an award of more than $5.5 million to a whistleblower who provided pertinent information that helped the SEC uncover an ongoing scheme on January 6, 2017.

According to the SEC’s order, the whistleblower was employed at the company involved in the wrongdoing.  The whistleblower proceeded to report the information directly to the SEC, which brought a successful enforcement action to end the scheme.

Enforcement actions from whistleblower tips have resulted in more than $904 million in financial remedies according to the SEC’s whistleblower main page.  The SEC whistleblower has awarded approximately $142 million to 38 whistleblowers since issuing its first award in 2012.

The Securities and Exchange Commission (the “SEC’) announced on December 5, 2016 that it had awarded a whistleblower approximately $3.5 million for coming forward with information that led to an SEC enforcement action.

The $3.5 million whistleblower award brings the total amount awarded to whistleblowers to $135 million to 36 whistleblowers.  In addition to the amount awarded to whistleblower, the SEC has collected over $874 million in financial remedies through enforcement actions brought about by whistleblower tips.

Under the SEC whistleblower program, established by the Dodd-Frank Act in 2011, the SEC is required to ardently protect confidentiality of whistleblowers and cannot disclose information that might indirectly or directly reveal a whistleblower’s identity.

The Securities and Exchange Commission announced on September 20, 2016 an award of over $4 million to a whistleblower.  The whistleblower’s original information alerted the SEC to a fraud.

The SEC whistleblower program was established by Congress in 2011 to incentivize whistleblowers with specific, timely and credible information about federal securities laws violations to report to the SEC.  Since its inception, the SEC whistleblower program has awarded more than $111 million to 34 whistleblowers.

The SEC lays out the process for a whistleblower.  First, a whistleblower submits a tip to the SEC.  The SEC will then analyze and investigate the tip.  A case will be filed if the tip is fruitful to the SEC and penalties will be ordered.  Notices of the covered actions will then be posted, and the whistleblower will file a claim.  Once the SEC determines the award, between 10 and 30 percent of what the SEC collected when monetary sanctions exceed $1 million, a payout will be made to the whistleblower from the Investor Protection Fund.

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